Televisa power shift

Former exex to sell off shares, control to CEO

MEXICO CITY — Televisa’s former chief corporate officer and his brother reportedly will sell their controlling shares to current chairman, president and CEO Emilio Azcarraga Jean.

The 10.2% stake owned by Guillermo and Jose Antonio Canedo White will enable Azcarraga Jean to consolidate his position as the owner of the largest single stake in the media giant. Assuming his family members vote with him, he will have enough shares to ensure company leadership.

After weeks of speculation about upper-level turmoil, Televisa announced the resignation of Guillermo Canedo White on Monday.

On Tuesday Mexico City daily Reforma published an interview with Guillermo Canedo White which reported that he and his brother had sold their shares in Televicentro, the holding company that unites Televisa’s investor families, to Azcarraga Jean. However, industry sources say the men have only reached an agreement.

Azcarraga Jean already owns 10% of Televicentro, and has reportedly inherited another 6.9%. The will of his father, former chairman Emilio Azcarraga Milmo, has yet to be made public but was leaked to leading news magazine Procesco, which published the text in this week’s edition.

If the report is true, Azcarraga Jean and his three sisters collectively own 37.6%, before any purchase from the Canedo White brothers.

Azcarraga Milmo’s last wife, Paula Cussi, now owns 16.9%, the next largest single holding. Alejandro Burillo Azcarraga, nephew of the former chairman, owns 14%. His return to the Televisa fold in June is believed to have precipitated the resignation of Canedo White.

“With (Azcarraga Jean’s) shares, and those of his sisters and of the wife, he will be able to strengthen his position within the group,” one analyst said.

However, the analyst cautioned that the holdings may be affected by they repayment of personal loans of Azcar-raga Milmo, which he instructed to be paid off with stock.

Televisa must also shortly renegotiate a major loan which has been backed by their personal stock holdings.

‘What’s going to happen’

“We still don’t know what is going to happen,” the analyst said. “I do think Azcarraga Jean will continue to be in charge, but he needs to focus more on running the business and giving value to his investors.”

Televisa’s ADRs fell 9% last week, though part of the decline was attributed to the Brazilian “samba effect.” They dropped again on Monday by more than 5%, a worse hit than other Mexican stocks, though the closing price on Tuesday had inched back up 50¢ to $27.50

The Canedo White announcement confirmed what had been rumored for weeks, which helped the stock, the analyst said.

Televisa is expected to release its second-quarter earnings reports imminently, he said, which he anticipates will show improvement over first-quarter results, though it will also include a one-time gain from the sale of its interest in PanAmSat.